Market Forces, Not Regulations, Are Leading to Coal’s Decline

Andrew Evans

The Trump Administration has proposed new emissions rules for new power plants, leading some to fear that coal-powered plants might make a comeback as a result. These fears are overblown, argues AAF’s Director of Energy Policy Philip Rossetti, as market incentives have driven the move away from coal and toward cheaper and more efficient power sources.

An excerpt:

Natural gas power plants experienced improving efficiency over the last several years. In fact, not only is natural gas already relatively inexpensive, its cost per unit of producible electricity continues to fall. While coal plants’ efficiency is mostly unchanged, the average heat efficiency of a natural gas power plant’s average heat rate efficiency has improved by 7 percent since 2007. A more efficient coal plant could be built in the future – and EPA Administrator Andrew Wheeler noted his hope that the proposed regulation would promote such a change. As there has been less investment in coal than in natural gas, however, it is difficult to envision future coal plants becoming efficient enough to compete on cost with natural gas.